Airline Profit to Fall After Peaking at $8.9 Billion, IATA Says

Airline earnings will shrink next year after peaking at $8.9 billion in 2010 as austerity measures and slower growth reduce demand and a flood of new planes hurts pricing power, the International Air Transport Association said.

Profit will probably decline to $5.3 billion in 2011, IATA Chief Executive Officer Giovanni Bisignani said in Singapore, adding that while the group has tripled its 2010 earnings forecast, margins are “razor thin” and below previous peaks.